Australia: SABMiller announces Joint Venture with Australian distributor

SABMiller plc, one of the world’s leading brewers, announced August 10 that it has entered into a joint venture with Coca-Cola Amatil (CCA) to import, market and distribute SABMiller’s international premium brands in Australia.

Under the terms of the agreement, SABMiller and CCA will each hold a 50% interest in the joint venture, which will be known as Pacific Beverages Pty Ltd. The joint venture will combine SABMiller’s marketing expertise with CCA’s comprehensive sales and distribution infrastructure to sell Peroni Nastro Azzurro, Pilsner Urquell and Miller Genuine Draft alongside CCA’s existing non-alcoholic beverage portfolio.

The joint venture, which is expected to be operational by Christmas 2006 following the fulfillment of certain conditions, will be headed by Ari Mervis, formerly Managing Director of SABMiller’s Russian operations. During the four years under Mr Mervis’ leadership, the Russian business grew beer volumes by more than 150% resulting in SABMiller holding the leading position in the international premium sector of this highly competitive market.

CCA is the largest non-alcoholic beverage company in the Asia-Pacific region and one of the world’s leading Coca-Cola bottlers, with operations in six countries. The premium beer market in Australia has grown by 15 percent per annum over the past five years, driven specifically by international imported premium brands. This transaction reflects SABMiller’s continued strategy to invest in its international brand portfolio and expand into growth markets.

André Parker, Managing Director of SABMiller Africa and Asia said: “We are delighted to partner with CCA in growing our premium beer business in Australia, as we believe that our joint expertise in the beverage industry will give us the necessary foundation to be a significant player in this segment.

“We believe there is enormous potential to grow the premium beer market in Australia for the Peroni Nastro Azzurro, Miller Genuine Draft and Pilsner Urquell brands, and look forward to working with our partner to build Pacific Beverages into a formidable contender in this category.”

Commenting on the transaction, Terry Davis, Managing Director of CCA Group said: “Both SABMiller and CCA own, market and distribute many of the world’s premium beverage brands. When they are combined with SABMiller’s world-class marketing capabilities and CCA’s strong customer relationships, sales force and distribution capabilities, you have a very solid platform to expand the premium beer offering in the Australian market.

“Over the past three years, CCA’s beverage sales to the hotel, restaurant and cafe channel have grown considerably and are now a significant contributor to the Australian beverage business’ earnings. “We are very confident the addition of the international premium beer brands to the stable will lead to further opportunities to expand our existing customer relationships.” Any profits are likely to be re-invested by the new venture into the business over the first few year to build long-term sustainable brand equity.

SABMiller plc is one of the world’s largest brewers with brewing interests or distribution agreements in over 60 countries across five continents. The group’s brands include premium international beers such as Miller Genuine Draft, Peroni Nastro Azzurro and Pilsner Urquell, as well as an exceptional range of market leading local brands. Outside the USA, SABMiller plc is also one of the largest bottlers of Coca-Cola products in the world. In the year ended 31 March 2006, the group reported US$2,626 million adjusted pre-tax profit and a turnover of US$15,307 million. SABMiller plc is listed on the London and Johannesburg stock exchanges.

Coca-Cola Amatil (‘CCA’) is the largest non-alcoholic beverage company in the Asia-Pacific region and one of the world’s largest Coca-Cola bottlers. It operates across six countries – Australia, New Zealand, Indonesia, South Korea, Fiji and Papua New Guinea – and has a diversified portfolio of products Including water, sports drinks, fruit juices, coffee, iced teas and packaged ready-to-eat fruit and vegetable products. CCA’s group revenue in 2005 was AUSD $4 billion and EBIT was AUSD $570.6 million. CCA produced 639 million unit cases of beverages across the group in 2005. It currently employs 19,000 people and has 37 manufacturing locations across its regions.

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